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Treasury Regulations (26 C.F.R.)

26 CFR § 1.1015-4

Transfers in part a gift and in part a sale.

Official textecfr.govlast amended

# (a) General rule.

Where a transfer of property is in part a sale and in part a gift, the unadjusted basis of the property in the hands of the transferee is the sum of—

(1) Whichever of the following is the greater:

(i) The amount paid by the transferee for the property, or

(ii) The transferor's adjusted basis for the property at the time of the transfer, and

(2) The amount of increase, if any, in basis authorized by section 1015(d) for gift tax paid (see § 1.1015-5).

For determining loss, the unadjusted basis of the property in the hands of the transferee shall not be greater than the fair market value of the property at the time of such transfer. For determination of gain or loss of the transferor, see § 1.1001-1(e) and § 1.1011-2. For special rule where there has been a charitable contribution of less than a taxpayer's entire interest in property, see section 170(e)(2) and § 1.170A-4(c).

# (b) Examples.

The rule of paragraph (a) of this section is illustrated by the following examples:

Example 1.

If A transfers property to his son for $30,000, and such property at the time of the transfer has an adjusted basis of $30,000 in A's hands (and a fair market value of $60,000), the unadjusted basis of the property in the hands of the son is $30,000.

Example 2.

If A transfers property to his son for $60,000, and such property at the time of transfer has an adjusted basis of $30,000 in A's hands (and a fair market value of $90,000), the unadjusted basis of such property in the hands of the son is $60,000.

Example 3.

If A transfers property to his son for $30,000, and such property at the time of transfer has an adjusted basis in A's hands of $60,000 (and a fair market value of $90,000), the unadjusted basis of such property in the hands of the son is $60,000.

Example 4.

If A transfers property to his son for $30,000 and such property at the time of transfer has an adjusted basis of $90,000 in A's hands (and a fair market value of $60,000), the unadjusted basis of the property in the hands of the son ins $90,000. However, since the adjusted basis of the property in A's hands at the time of the transfer was greater than the fair market value at that time, for the purpose of determining any loss on a later sale or other disposition of the property by the son its unadjusted basis in his hands is $60,000.

[T.D. 6500, 25 FR 11910, Nov. 26, 1960, as amended by T.D. 6693, 28 FR 12818, Dec. 3, 1963; T.D. 7207, 37 FR 20799, Oct. 5, 1972]

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In this part (40 sections)
  1. 1.1002-1 · Sales or exchanges.
  2. 1.1011-1 · Adjusted basis.
  3. 1.1011-2 · Bargain sale to a charitable organization.
  4. 1.1012-1 · Basis of property.
  5. 1.1012-2 · Transfers in part a sale and in part a gift.
  6. 1.1013-1 · Property included in inventory.
  7. 1.1014-0 · Table of contents.
  8. 1.1014-1 · Basis of property acquired from a decedent.
  9. 1.1014-2 · Property acquired from a decedent.
  10. 1.1014-3 · Other basis rules.
  11. 1.1014-4 · Uniformity of basis; adjustment to basis.
  12. 1.1014-5 · Gain or loss.
  13. 1.1014-6 · Special rule for adjustments to basis where property is…
  14. 1.1014-7 · Example applying rules of §§ 1.1014-4 through 1.1014-6 to…
  15. 1.1014-8 · Bequest, devise, or inheritance of a remainder interest.
  16. 1.1014-9 · Special rule with respect to DISC stock.
  17. 1.1014-10 · Basis of property acquired from a decedent must be…
  18. 1.1015-1 · Basis of property acquired by gift after December 31, 1920.
  19. 1.1015-2 · Transfer of property in trust after December 31, 1920.
  20. 1.1015-3 · Gift or transfer in trust before January 1, 1921.
  21. 1.1015-4 · Transfers in part a gift and in part a sale.
  22. 1.1015-5 · Increased basis for gift tax paid.
  23. 1.1016-1 · Adjustments to basis; scope of section.
  24. 1.1016-2 · Items properly chargeable to capital account.
  25. 1.1016-3 · Exhaustion, wear and tear, obsolescence, amortization, and…
  26. 1.1016-4 · Exhaustion, wear and tear, obsolescence, amortization, and…
  27. 1.1016-5 · Miscellaneous adjustments to basis.
  28. 1.1016-6 · Other applicable rules.
  29. 1.1016-10 · Substituted basis.
  30. 1.1017-1 · Basis reductions following a discharge of indebtedness.
  31. 1.1019-1 · Property on which lessee has made improvements.
  32. 1.1020-1 · Election as to amounts allowed in respect of depreciation,…
  33. 1.1021-1 · Sale of annuities.
  34. 1.1031-0 · Table of contents.
  35. 1.1031(a)-1 · (a)-1 Property held for productive use in trade or…
  36. 1.1031(a)-2 · (a)-2 Additional rules for exchanges of personal property.
  37. 1.1031(a)-3 · (a)-3 Definition of real property.
  38. 1.1031(b)-1 · (b)-1 Receipt of other property or money in tax-free…
  39. 1.1031(b)-2 · (b)-2 Safe harbor for qualified intermediaries.
  40. 1.1031(c)-1 · (c)-1 Nonrecognition of loss.
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